Robert T. Cozean - Page 8

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            respondent contends that the availability of qualified attorneys                             
            to handle cases such as petitioner's was not limited, and that                               
            petitioner has failed to establish the existence of any special                              
            factor that would warrant departure from the statutory cap.                                  
            Accordingly, respondent argues that an award of attorney's fees                              
            in this instance should be calculated at the adjusted statutory                              
            rate of $104 per hour.7                                                                      
                  Respondent also disputes petitioner's claims for the                                   
            accountants, Victor Harris and Pamela Zimmerman. Respondent                                  
            argues that since the compensation rate for attorneys cannot                                 





                  7  This Court uses the Consumer Price Index (CPI) for all                              
            urban consumers to adjust the $75 hourly limit for increases in                              
            the cost of living.  Cassuto v. Commissioner, 93 T.C. 256, 273                               
            (1989), affd. in part and revd. in part 936 F.2d 736 (2d Cir.                                
            1991).  We have held that 1981 is the appropriate base year for                              
            calculating cost of living increases under sec.                                              
            7430(c)(1)(B)(iii).  Bayer v. Commissioner, 98 T.C. 19, 23                                   
            (1992); Cassuto v. Commissioner, supra at 269.  Nevertheless, the                            
            Court of Appeals for the Fifth Circuit, to which this case is                                
            appealable, has held that the appropriate base year for                                      
            calculating cost of living increases is Jan. 1, 1986.  Heasley v.                            
            Commissioner, 967 F.2d 116, 125 (5th Cir. 1992), affg. in part                               
            and revg. in part T.C. Memo. 1991-189.  We follow that holding                               
            here.  Golsen v. Commissioner, 54 T.C. 742, 756-758 (1970), affd.                            
            445 F.2d 985 (10th Cir. 1971).                                                               
                  We note that the $104 hourly rate utilized by respondent                               
            apparently represents the $75 statutory rate, adjusted by a 39-                              
            percent increase in the C.P.I. from Jan. 1986 to July 1995.  The                             
            record indicates that a portion of the fees claimed by petitioner                            
            was billed after July 1995.  Nevertheless, petitioner's objection                            
            to respondent's position relates only to the applicability of the                            
            statutory cap, and not to the calculation of the $104 amount.                                




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